Has the government ignored the meat sector?

Trans. by B.DULGUUN

Many Mongolians were shocked to see headlines reading “Atar Urgoo Bakery to sell half loaves of bread” and “Number of people staving off hunger with dog meat increases”. Another surprise is awaiting meat-loving Mongolians, as meat companies have begun preparing to sell smaller sized packages of meat at 200 to 250 grams.
“People’s income has drastically declined, causing the purchase index to decrease. Fewer buyers are purchasing large quantities of meat. Hence, we’ve completed preparation for packaging meat at more rational amounts, sufficient for one or two meals,” explained meat producers.
Last year, four meat producers sold 2.5 to 5 kg of bone-in meat in packages. Meat without bones was sold in 500 g packages. This year, six meat producers from rural areas were selected for tenders as reserve meat managers. They received licenses to process and reserve meat in October 2014, and were ordered to begin preparing meat from rural areas last November, and finish by the end of the first week of January 2015. Four of the meat managers reserved a total of 12,000 tons of meat for the capital, and the remaining two companies have reserved 2,000 tons of meat for Darkhan-Uul and Orkhon provinces. However, operating expenses for the selected six tenders haven’t been included in the Program to Stabilize Prices of Key Commodities and Products, which was approved last week. The Executive Director of the Mongolian Meat Association, M.Jadambaa, commented on this.
He said, “[Not including operating expenses for tendered meat managers] is a clear example of the inconsistency in government work. The price of reserve meat was approved under an agreement with the Ministry of Food and Agriculture, yet operating expenses provided to meat producers were annulled during the plenary session. Last year, 4.5 billion MNT was promised to us but the government still hasn’t provided it. Under these conditions, how can the operations of domestic industries progress efficiently? We will take the next step if there’s conflict over whether operating expenses will be provided or not. The government is mistaken if they believe that the program implemented for four years has given off results. During this period, when an economic crisis is faced everywhere and people’s wallets have become lighter, the government should be supporting the private sector with policy.”
Has the government ignored the meat sector and will it cause meat prices to become unstable? Presently, beef costs 6,500 to 8,000 MNT per kg; mutton costs 5,000 to 6,500 MNT per kg; chevon (goat meat) costs 5,000 to 6,000 MNT per kg; and horse meat costs 4,500 to 6,500 MNT per kg. Most economists link the price stability of meat to the outcome of the Program to Stabilize Prices of Key Commodities and Products. As a matter of fact, the average price of meat has been well over 7,000 MNT in recent years. Now, the average price of meat ranges between 5,000 to 6,000 MNT. Regarding whether the government has renounced the meat sector, the Ministry of Food and Agriculture denies this.
President M.Jamdambaa asked about a solution for selling the meat reserved for spring supply without burdening businesses or hindering the livelihood of locals. “The public is eager to find out when the reserved meat will be sold, indicating the urgent need and demand for meat. Resolution No.A-166/A-24 for the Program to Stabilize Prices of Key Commodities and Products was established by the President of Mongol Bank and Minister of Food and Agriculture. According to the resolution, reserved meat has to be put up for sale based on a management agreement for reserved meat. Yet, the Ministry of Food and Agriculture and other relevant agencies haven’t determined when, and at what price, to sell reserved meat. Meat reserve managers are reluctantly paying rent for stockrooms, electricity bills, and providing salaries for employees, without knowing what to do. We will talk to these agencies and make a final decision,” he said.
Baatruud Tenger LLC, Makh Impex LLC, Makh Market LLC, and ANDM LLC, who received licences to supply reserved meat for Ulaanbaatar, have reserved 3,000 tons of meat. Darkhan Meat Foods LLC and Erdmiit LLC have reserved 1,000 tons of meat for Darkhan-Uul and Orkhon Provinces. These companies signed an agreement with the President of Mongol Bank and the Minister of Food and Agriculture, agreeing to sell beef for 5,950 MNT, mutton for 5,750 MNT, and chevon for 4,900 MNT per kg.
Directors of the six tenders stressed the need to reconsider negotiated prices. They said if the agreement isn’t renegotiated, there’s a possibility that the companies would absorb operating costs and charge an extra 1,000 MNT per kg. They were deeply troubled by the fact that markets wouldn’t allow such high prices, knowing that people would hesitate to buy such expensive meat.

Source: Uls Turiin Toim

Short URL: http://ubpost.mongolnews.mn/?p=13284

Posted by The UB Post
on Jan 30 2015. Filed under Opinion.
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